Prosecutors Appeal Kim Beom-soo’s Acquittal and Disclose Evidence... Kakao Responds: “Evidence Already Dismissed”

[Financial News] After prosecutors appealed the first-instance verdict acquitting Kim Beom-soo of alleged collusion in manipulating SM Entertainment’s stock price and disclosed some evidence, Kakao countered that the evidence had already been dismissed by the court.
On the 29th, Bae, Kim & Lee LLC, representing Kakao, stated, “All of the prosecution’s arguments were thoroughly reviewed during the first trial and subsequently dismissed by the court.”
They added, “While certain pieces of evidence have been selectively disclosed, these were already examined during the first trial and were refuted by more specific and credible evidence. The disclosed evidence has been sensationally edited, significantly distorting its actual meaning.”
The firm continued, “Since an appeal has been filed, the defense will thoroughly address the prosecution’s arguments and all aspects of the case during the appellate trial to once again confirm the substantive truth.”
The previous day, the Seoul Southern District Prosecutors' Office appealed the first-instance verdict for Kim Beom-soo, head of Kakao’s Future Initiative Center, citing 'factual errors and misinterpretation of the law.'
Prosecutors stated, “The first trial accepted the defendants’ claim that ‘it is difficult to see there was collusion to block a tender offer or manipulate stock prices, and that the shares were acquired to secure supply in anticipation of a price increase,’ and rendered a not-guilty verdict. However, this contradicts or fails to consider numerous pieces of evidence, such as messages and recorded calls among those discussing blocking Hybe’s tender offer and manipulating prices for Kakao’s acquisition of SM.”
Prosecutors argued that Kakao’s large-scale purchase of SM shares on February 28, 2023, the last day of the tender offer, constituted manipulative trading. They also refuted the court’s criticism of 'separate investigations,' asserting that the investigation was not improper. Nonetheless, prosecutors said they would take the court’s unusual remarks seriously, regardless of the verdict’s validity, and would seek institutional improvements going forward.
Previously, the 15th Criminal Division of the Seoul Southern District Court, presided over by Judge Yang Hwan-seung, acquitted Kim Beom-soo, who was indicted for violating the Capital Markets Act. The court also acquitted Bae Jae-hyun, former Chief Investment Officer of Kakao; Kim Seong-su, former CEO of Kakao Entertainment; and Hong Eun-taek, former CEO of Kakao, who faced the same charges. Kakao and Kakao Entertainment, indicted under the joint penal provisions, were also found not guilty.
The court ruled that Kakao’s large-scale on-market purchases of SM shares during Hybe’s tender offer period could not be deemed price manipulation solely because they affected the market price. The court also found that the testimony of Lee Jun-ho, former Head of Investment Strategy at Kakao Entertainment—the prosecution’s de facto sole evidence of collusion between Kakao and One Asia Partners—lacked credibility. In an unusual move, the court also criticized the prosecution’s investigative methods.
welcome@fnnews.com Jang Yu-ha Reporter